Boulder's muni backers see vote as confidence boost

City likely to move forward with condemnation in early 2014

In one sense, the defeat of Issue 310, the Xcel Energy-backed charter amendment that city leaders said would "kill" or at least "hamstring" a future Boulder electric utility, leaves Boulder right where it was on Nov. 3.

Appraisers continue to develop their estimates of the value of Xcel's Boulder distribution system in preparation for filing for condemnation in early 2014.

Xcel and Boulder officials continue to meet in a task force to analyze possible alternatives to municipalization that would still greatly reduce greenhouse gas emissions from power production.

And Boulder's attorneys continue to weigh the impact of a recent Colorado Public Utilities Commission decision that the city should ask the PUC to rule on whether it can serve county customers and whether it should be able to take over substations and transmission lines outside the city before it moves ahead with condemnation.

Indeed, Xcel Energy officials contend the city is in a more constrained position now than before the election because voters also passed Issue 2E, which puts a $214 million cap on acquisition costs.

Xcel Energy spokeswoman Michelle Aguayo said the vote has "no impact" on the company.

"This vote wasn't about Xcel Energy," she said. "All the moves have to come from the city, and the voters have told the city they don't want to spend an undetermined amount of money."

But supporters of a Boulder electric utility feel emboldened to move ahead and feel the vote only strengthens the city's negotiating position should it choose a path other than municipalization.

"Xcel has had some doubt about the city's conviction to form a municipal utility because the vote was so close in 2011," Councilman Macon Cowles said. "That doubt should be erased by this vote and leaves the city free to do what it needs to do."

Heather Bailey, Boulder's executive director of energy strategy and electric utility development, said the vote was a "big confidence boost."

"It reinforced the fact that the community wants us to move toward something different, toward municipalization or some other energy-based solution," she said.

If Issue 310 had passed, Bailey said the people working on the Energy Future project would be trying to figure out whether they'd be able to interest investors in the utility, given the requirement for another vote on the utility's total debt limit, and whether condemnation was still feasible.

Instead, they're working on a transition program for the future utility as they continue negotiations with Xcel over buying the distribution system, a necessary prerequisite to filing condemnation.

At the same time, Xcel Energy is working on a more detailed analysis of its proposed alternatives to municipalization. These are new products Xcel believes it could offer throughout Colorado, achieving larger greenhouse gas reductions than if Boulder strikes out on its own.

City officials had hoped to present the results of that analysis in December, before they filed for condemnation, but the company has now told the city it won't have those results until sometime in the spring.

Bailey said condemnation can begin while negotiations over alternatives continue.

But Cowles called continuing discussions with Xcel a "waste of time."

"It's simply not credible," he said of Xcel's contention that it needs six months to do detailed analysis of proposals it made this past summer. "It's a litigation tactic on their part, and I think it's a waste of time. Our goal cannot be met within a model of a regulated monopoly."

Councilman Tim Plass said the conversation with Xcel should continue, but he doesn't expect the city to change its path.

"I don't see us changing our timetable," he said. "I still think there is an opportunity for negotiation. Given the uncertainties and costs of litigation, we should always be willing to talk to Xcel. What's out there in their package is not really meeting our goals, but I'm willing to keep talking."

At the same time, the city has to wrestle with a PUC process that may put a monkey wrench in plans to acquire a transmission loop and two substations in the county that serve both city and county customers.

The city's engineering analysis found that including those areas in the Boulder utility would create a more reliable system.

The city may look for a way to buy the system but lease back the areas serving the county customers to Xcel Energy, but the PUC also has concerns about how the city's plans could affect regional reliability.

In an election night statement, Meg Collins of Voter Approval of Debt Limits, the pro-310 group, urged county residents to focus on the PUC process as a way to protect their rights.

"The PUC will bring a sense of fairness and justice to those not represented in the municipal utility process," she said.

Collins said the PUC requirements may make it harder for the utility to stay under the $214 million cap, and Aguayo said Xcel does not believe Boulder will be able to purchase the company's assets now.

Supporters of the utility have consistently said Xcel is inflating the value of its system, but Plass said he struggled, as a councilman and a voter, with Issue 2E because of just those concerns.

People on all sides of the issue will soon be looking to the courts for a final determination of the acquisition costs.

Boulder Chamber of Commerce spokeswoman Angelique Espinoza said she hopes the city moves cautiously, keeping in mind that voters not only struck down an initiative backed by Xcel but also imposed new limits on the utility.

The chamber has called for a simple yes or no vote on the utility once all the final costs are known.

"If those start-up costs are too high, it's not going to be workable, so we have to get those numbers," said newly elected Councilman Sam Weaver, who worked on the municipalization analysis in the city's community working groups.

The Boulder alt-country band gives its EPs names such as Death and Resurrection, and its songs bear the mark of hard truths and sin. But the punk energy behind the playing, and the sense that it's all in good fun, make it OK to dance to a song like "Death." Full Story